Markets have been hard hit with the start of the new financial year.
With the stock market down by almost 10% in the past 12 months, the stock index has been down more than 20%.
“In the coming months, this will probably cause some volatility in the markets, but we have the Fed, Federal Reserve Bank of New York, the Federal Reserve, the Treasury Department, Treasury and a host of others to say they are prepared to keep their interest rates where they are, that the economy is doing well and that it will be an easy and calm transition,” said Ben O’Neill, chief economist at RBC Capital Markets.
The Federal Reserve will raise rates by a quarter of a percentage point in February, and in the next six months, interest rates will rise by half of a point.
“If we get out of this economic slump, we are going to see more consumer spending and more spending in other sectors, and we are looking at some longer-term gains in the stock markets,” said O’Neil.
As we know from other economic data, markets are going up, the housing market is going up and the economy will start to recover.
However, the Fed is likely to be the first to hike interest rates, especially as it continues to push up its asset purchases.
Inflation has risen in the US since 2014, but there has been a gradual recovery in inflation, which is forecast to slow to 2.6% by 2021.
This is the first time in six years that the Fed has raised rates in the aftermath of the Great Recession, and it could be the last time.
We don’t know whether we are living through the last economic downturn or just a continuation of the first economic downturn.